Victek, Defense Stocks Gain in Seoul on Missile Report

By Saeromi Shin -
Nov 23, 2012

Victek Co. (065450) led gains in South
Korea’s defense-related stocks on the second anniversary of the
North’s shelling of Yeonpyeong Island and after a report that
the U.S. detected preparations by the reclusive regime to launch
long-range missiles.

Victek, a maker of electronic warfare equipment, rallied
7.8 percent to 1,520 won at the close on the Korea Exchange, its
steepest gain since April 23. Firstec Co., a maker of components
for helicopters and armored vehicles, advanced 3.2 percent to
1,910 won, while Speco Co. (013810) added 5.8 percent to 2,270 won.

The U.S. told Japan and South Korea it detected
preparations indicating North Korea could be preparing to test
long-range ballistic missiles as early as this month, the Asahi
newspaper reported today. South Korea is unable to confirm the
report, a press official at South Korea’s Joint Chiefs of Staff
said on condition of anonymity due to military policy.

“Some thematic defense stocks rallied on the reports,
while the broader stock market reaction appears to be calm,”
said Heo Pil Seok, chief executive officer at Midas
International Asset Management Ltd., which oversees $5 billion.
“No more detailed reports on the potential preparations
followed, and previous cases have shown that the North’s threats
mostly turn out to have only one-off impact on markets.”

North Korea’s shelling of the Yeonpyeong Island on the
western sea border with the South on Nov. 23, 2010, killed four
South Koreans. The two Koreas technically remain at war after
the 1950-1953 conflict ended without a peace treaty.